US income gap widest in decades, based on housing market data

The income gap among metropolitan regions in the United States has reached new heights based on home prices in 2013, according to a new report.

Income disparity between the 10th and 90th most expensive housing
markets in the US last year is the largest since such records
began in 1969, according to the Financial Times.

An analysis of US Commerce and Labor Department data for the
Financial Times by the property website Trulia found that Boston,
the 10th most expensive region for housing, had a per-capita
income of 1.61 times that of Cincinnati, ranked at 90th. The
lowest gap was 1.36 times occurred in 1976, between San Francisco
and El Paso.

Inconsistent job recovery across the US since the economic
recession that began in 2008 has led to a wide range of regional
housing-market rebounds.

“Housing markets are playing out at very different speeds
partly as a result of the lack of geographical breadth in the
labour market. Certain sectors of the economy are performing
better than others, propelling some housing markets over
others,” said Fannie Mae economist Mark Palim.

US officials see a resurgent housing market as a symbol for
overall economic recovery. But a weak job market has stalled such
a comeback.

“The housing sector was at the epicentre of the US financial
crisis and recession and it continues to weigh on the
recovery,” said Stanley Fischer, the deputy chairman at the
Federal Reserve, in a speech this week.

He added that as opposed to previous economic rebounds,
“residential construction [has been] held back by a large
inventory of foreclosed and distressed properties and by tight
credit conditions for construction loans and mortgages.”

Despite an overall increase in job growth since 2008, wages have
dropped significantly, according
to new Labor Department data. More than 200,000 jobs were created
for the sixth straight month in July, according to Labor, though
wages remained stagnant.

Workers in the US earned an average of $24.45 an hour in July, up
one cent from June. In the last year, wages have grown just 2
percent, basically stuck at the same level since late 2009.

Meanwhile, workers in the US are earning an average of 23 percent
less than earnings from jobs that were lost during the economic
recession that began in 2008, according to a new report.

The average salary in sectors where jobs were lost - especially
manufacturing and construction - during the recession was
$61,637, according to the report from the United States
Conference of Mayors. In comparison, job gains in those sectors
through the second quarter of 2014 came with average wages of
$47,171. The difference comes out to a $93 billion in lower wage
income, the group found.

There has been no shortage of reports recently detailing an
ever-widening income gap in the US. In April, for example, the
Sadoff Investment Research firm found
that the top one percent of wage-earning households in the US
were reaping in around $1,264,065 in 2012 — or around 41-times as
much as the average income for all wage-earners, who pulled in a
comparable meager mean income of $30,997 that year.

In June, the AFL-CIO reported that the ratio of CEO pay to worker
pay has increased by
more than 500 percent in the last thirty years.

Growing income inequality is the biggest risk the world may face
within the next 10 years, the World
Economic Forum said in January.